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National 'PropCo' to manage NHS primary care estate

17 January, 2012 | By David Williams

A new national property company is to be set up to manage the primary care trust estate.

CN’s sister title Health Service Journal has learned that the “PropCo” – a generic working name for an asset holding firm – will take the form of a company wholly owned by the Department of Health, which is expected to make an announcement in the next few weeks.

The move will solve the problem of who takes over billions of pounds worth of property, such as primary care centres, clinics, community hospitals and offices, after primary care trusts are abolished in April 2013 and replaced with groups of commissioning GPs.

The PropCo will also take ownership of the public shares of assets built under the Local Improvement Finance Trust scheme. LIFT properties are 60 per cent privately owned, with the remainder split equally between PCTs and the DH.

There are more than 2,000 full time equivalent estates and facilities management roles in PCTs. A leaked DH document showed these roles were earmarked for transfer to “PropCo and other”.

NHS estate expert Rob Harrison, a partner at Bevan Brittan, said the most interesting questions concerned how the private sector could get involved, in the form of management contracts or joint ventures.

He said: “This is a real opportunity to sort out what’s wrong – the portfolio has not been managed effectively up to now.”

Mr Harrison said he believed a clear national strategy for NHS property, including future private sector involvement, was likely to come after an initial announcement on the PropCo.

It is understood the DH has decided in principle that it is preferable for PCT estate to be run by a single national management organisation than by numerous PCT successor bodies.

The PropCo will be devolved into regional subsidiaries, as a single centralised body would struggle to manage a diverse national portfolio effectively. But the DH has not yet finalised plans for how many regional arms there would be or what geographical areas each would cover.

One well-placed source speculated that the PropCo’s regional arms could themselves have subsidiaries. These could work closely with clinical commissioning groups at a local level, reconfiguring the estate in line with local service redesigns. This could involve decommissioning redundant hospitals, investing in capital projects such as telehealth technology.

Some community service assets are to be transferred to foundation trusts that took over services from PCTs last year.

But this was not permitted where social enterprises took over community services. A DH spokeswoman said social enterprises would be granted “leases or tenancy agreements” running for the same length of time as their service contracts.

The DH emphasised that the PropCo’s role would be management of the estate, rather than disposal of surplus property.

But on 12 January NHS deputy chief executive David Flory wrote to all NHS chief executives urging them to sell off any surplus assets, saying this would be “a win-win result for all concerned.”

“The NHS reduces its running costs and will receive income from the surplus land sales to re­invest in healthcare. Building new homes reduces unemployment and provides new homes for the public.”

Contractors have long called for clarity on plans for the NHS estate.

Bam Construct director of health David Slack said it was “an extremely positive development”.

“A fixed procurement environment, such as guidelines and structured management of the estate, is helpful for the whole construction industry,” he added.

Interserve divisional director for health Andrew Jowett said he “cautiously welcomed” the proposals.

“Having one national organisation overseeing the management of the PCT estate rather than a multiplicity of organisations with competing interests should ensure more consistency of approach, allowing innovative solutions around the estate to be cascaded across England.

“The initiative will provide a much needed impetus to the vital question of the future of the estate, in which the private sector can work more in partnership with the NHS. This in turn will help to develop opportunities to maximise the full potential of the vast portfolio, to ensure that local communities receive a modern and accessible service.”